What's an Employer to Do When a Customer Says, "Give Them the FBI Treatment…"?

07 April 2014 Labor & Employment Law Perspectives Blog

Picture this scenario: a marketing company signs a new client. As part of the contract between them, the client requires the marketing company to sign a document agreeing that any marketing company employees who perform work for the client must pass a broad background check including a full criminal history, confirmation of past employers and home addresses reaching years back, and a full drug screen. This document is handed to the marketing company as a simple, standard document that all service providers must sign. Far too often, the marketing company in this scenario simply signs the document along with all of the others without thinking twice.

In this situation, the company’s employees working on the job are marketing people. They are not operating dangerous machinery, dispensing controlled substances, or dealing with the client’s financial data. Most of the employees will not even step foot on the client’s property. Instead, they will be doing work that is creative in nature and will perform services remotely on a computer. Given the current state of the law addressing privacy protection and background and criminal checks in particular, the employer could face potential liability if it agrees to the client’s broad background check requirements and subjects its employees to the process.

For example, the EEOC has taken a vocal stand against the use of blanket criminal history searches  based on findings that criminal record-based exclusions may operate to disproportionately and unjustifiably exclude people of a particular race or national origin. Under the EEOC’s guidelines, criminal history checks may only be permitted if the employer develops a targeted screen considering the nature of the crime, the time elapsed, and the nature of the job.

In addition, the Fair Credit Reporting Act and similar state laws require employers to obtain consent and provide specific information to employees before running background checks. Moreover, drug testing as well as background and criminal history checks can potentially violate employee privacy rights if they do not relate to the position.

What then is a company to do when faced with a third party requirement that its employees undergo background checks? Fortunately, there are several practical and simple steps employers can take to avoid the pitfalls associated with these requests. The first, and often overlooked option, is to simply inform the entity requesting background checks that your employees do not appear to fall within the scope of the policy. Explain that they will not be on the client’s property and will not have access to financial or confidential data. Often it is as simple as making that point and the third party will agree that no background searches need be performed. Another option is to offer a revised version of the policy that is tailored to the work being performed. A third solution is to offer to have any employees performing work for the client sign a non-disclosure agreement. Finally, if none of these measures work, ask the third party to agree to indemnify your company for any liability associated with the background check — that request will often result in a quick change in position.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.